Increased survival of very premature infants has been accompanied by an increased incidence of bronchopulmonary dysplasia (BPD). In the new BPD, alveolar septa are thickened with collagen and 1-smooth muscle actin-positive, transforming growth factor (TGF)-?-positive myofibroblasts. We have isolated mesenchymal stromal cells from the tracheal aspirates of premature infants. These cells produce TGF-?1 and undergo TGF-?-induced myofibroblastic differentiation, suggesting that, in the absence of other signals, myofibroblastic differentiation represents the default program for mesenchymal stromal cell specialization. Mesenchymal stromal cells also appear to be potent biomarkers for the development of BPD; accounting for the potential influences of gender, birth weight and gestational age, isolation of mesenchymal stromal cells increased the adjusted odds ratio of BPD over 31-fold. Finally, our microarray data show that stromal cells express high levels of mRNAs encoding matricellular proteins, a subfamily of non-structural extracellular matrix proteins that regulate cell-matrix interactions and fiber deposition. Together, these data support our general hypothesis that mesenchymal stromal cell myofibroblastic differentiation and matricellular protein expression play critical roles in BPD pathogenesis. To test this hypothesis, we propose the following Specific Aims: 1. Correlate neonatal lung mesenchymal stromal cell matricellular protein expression with clinical outcomes. We hypothesize that: i) mesenchymal stromal cells maintain a stable pro-fibrotic phenotype of matricellular protein expression that is coupled with myofibroblastic differentiation; and (ii) expression of the matricellular proteins connective tissue growth factor (CTGF), SPARC and periostin predicts BPD development. 2. Examine the effects of matricellular protein expression on neonatal lung mesenchymal stromal cell proliferation and differentiation, as well as the roles of glycogen synthase kinase (GSK)-3? and ?-catenin in myofibroblastic differentiation in vitro. We hypothesize that (i) matricellular proteins induce mesenchymal stromal cell proliferation and are required for maximal TGF-?-induced myofibroblastic differentiation; and (ii) myofibroblastic differentiation is dependent on Nox4/GSK-3?/?-catenin signaling. 3. Examine the expression, localization, requirement and sufficiency of matricellular proteins and their downstream signaling intermediates for the BPD phenotype in vivo. We hypothesize that: i) fibroblast-specific expression of CTGF is sufficient for the BPD phenotype; (ii) SPARC and periostin are required for hyperoxia-induced hypoalveolarization and interstitial fibrosis; iii) mesenchyme-specific inhibition of GSK-3? is sufficient for the BPD phenotype; and iv) matricellular protein expression in increased in the lungs of infants with BPD. Completion of this work will provide insight into the pathogenesis of BPD, lead to the development of more accurate biomarkers, and provide new information on the role of matricellular proteins in lung fibrosis.